Why this matters now
Marketing reform is central to farmer incomes and the farm-laws debate — the APMC system, e-NAM, FPOs and contract farming are key GS-3 issues.
The APMC mandi system
Most produce is sold through state Agricultural Produce Market Committee (APMC) mandis. While they were meant to protect farmers, problems include limited market access, cartelisation by traders/middlemen, high commissions and charges, delayed payments, and a long chain that gives farmers a small share of the consumer price.
Reform measures
- e-NAM — a pan-India electronic trading platform linking mandis;
- Farmer Producer Organisations (FPOs) — collectivising small farmers for better bargaining and value addition;
- Contract farming and model APLM/contract-farming acts;
- Promotion of direct marketing, warehousing and negotiable receipts.
The reform debate
The 2020 farm laws sought to allow trade outside mandis, contract farming and freer stock-holding — but were repealed (2021) after farmer protests over fears about MSP and corporate dominance. The challenge is to expand market choice and investment while safeguarding small farmers through MSP, FPOs and strong institutions.
UPSC angle
Know the APMC system and its problems, e-NAM, FPOs, contract farming, and the 2020 farm-laws episode (and repeal). Link to MSP and doubling farmers’ incomes.
Frequently asked questions
What is the APMC system?
State Agricultural Produce Market Committees that regulate wholesale agricultural markets (mandis) where farmers sell produce.
What is e-NAM?
The electronic National Agriculture Market — an online platform integrating mandis for transparent, pan-India trading.
What are FPOs?
Farmer Producer Organisations — collectives of small farmers that improve bargaining power, inputs and value addition.
What happened to the 2020 farm laws?
They aimed to liberalise agricultural marketing but were repealed in 2021 after sustained farmer protests.